The Paradise Papers

A Four Corners exclusive: Inside the tax havens of the rich and powerful.

"You're talking about the biggest corporations in the world. They hide their money and move their money around the world so that they pay less tax."

On Monday Four Corners will take you inside the secretive world of tax havens where corporations and the wealthy operate far from public view.

"We're seeing things that people never thought would see the light of day."

In an investigation that spans the globe, Four Corners will reveal the lengths some of the world's most powerful business figures and global corporations are going to, to avoid paying tax.

"In the tax world, the line between law and illegality is always fuzzy."

As tax authorities in Australia and across the globe try to claw back money from the big multinationals, reporter Marian Wilkinson will show how a web of offshore operators help organise elaborate international tax avoidance schemes.

"I think the public has a right to know what we're going to reveal."

The Paradise Papers, reported by Marian Wilkinson and presented by Sarah Ferguson, goes to air on Monday 6th November at 8.30pm. It is replayed on Tuesday 7th November at 1.00pm and Wednesday 8th at 11pm. It can also be seen on ABC NEWS channel on Saturday at 8.10pm AEST, ABC iview and at abc.net.au/4corners.

Transcript

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SARAH FERGUSON: Welcome to Four Corners.

Tonight we bring you the story that's making news around the world - the Paradise Papers.

It's the largest leak of documents in history, revealing the hidden financial dealings of the world's rich and powerful, including top corporations, 120 politicians, oligarchs, celebrities, and even the Queen.

Following the revelations we brought you in last year's Panama Papers, Four Corners has now been given access to more than thirteen million documents in partnership with the International Consortium of Investigative Journalists. The documents were originally leaked to the German newspaper Suddeutsche Zeitung.

Among the scores of high profile names in the documents is Donald Trump's Commerce Secretary Wilbur Ross, with new details on his financial ties to a Russian company controlled by members of Vladimir Putin's inner circle.

The offshore financial dealings of the world's top corporations are also exposed, including companies doing big business in Australia like Nike and the giant Swiss commodities firm, Glencore.

Even the financial affairs of the late rockstar, Michael Hutchence, are captured in the Paradise Papers.

The most significant documents in this leak, almost seven million, come from an offshore law firm called Appleby, operating in the tax haven of Bermuda.

Marian Wilkinson began her investigation there.

MARIAN WILKINSON: In the Atlantic Ocean off America's East coast is a string of islands once famous for its buccaneers. The tiny British territory of Bermuda looks like heaven. But it's better known as a haven - for big corporations and the super-rich to avoid paying taxes in their home country.

MATTHEW GARDNER, INSTITUTE OF TAXATION AND ECONOMIC POLICY: The most recent data tell us that US companies reported a little over $100 billion of profits that they claim they're earning in Bermuda. The main problem with this is that the entire Bermuda economy is about $6 billion, so US companies are reporting a flow of profits in Bermuda that is roughly 18 times the size of the country's entire economy. Pretty clearly the vast majority of these projects are purely an accounting fiction.

MARIAN WILKINSON: We're going to Bermuda because it's become one of the most notorious tax havens in the world. This dot on the map is where our investigation begins. Bermuda is a holiday playground for famous A listers like New York billionaire, Michael Bloomberg, and Hollywood actor, Michael Douglas. Last year Oxfam named Bermuda the worst tax haven on the planet.

BOB RICHARDS, FORMER MINISTER OF FINANCE, BERMUDA: Oxfam needs to concentrate their efforts on actually feeding those hungry babies instead of paying attention to places like Bermuda.

MARIAN WILKINSON: So, Mr. Richards would you deny that Bermuda is a tax haven?

BOB RICHARDS, FORMER MINISTER OF FINANCE, BERMUDA: Absolutely.

MARIAN WILKINSON: But what's Bermuda's corporate tax rate?

BOB RICHARDS, FORMER MINISTER OF FINANCE, BERMUDA: Absolutely Tax haven and tax rate are not the same thing, they're not even related. A tax haven in modern vernacular means a place where people can hide dirty money, where corporations can do illegal and nefarious things, places that are magnets for money laundering, and things of that nature, and terrorist financing, all that is what goes with a tax haven. We do not do those things. Our tax rate is a matter for the people of Bermuda.MARIAN WILKINSON: And it's zero, isn't it?

BOB RICHARDS, FORMER MINISTER OF FINANCE, BERMUDA: Absolutely. It has always been zero, always.

MARIAN WILKINSON: That zero tax rate brings big business to Bermuda. If you want to avoid taxes on your corporate profits or private wealth, chances are you'll hire a lawyer in Bermuda. If you want one of the best, you'll come to this discreet office. The name on the door is Appleby.

GERARD RYLE, DIRECTOR, ICIJ: Their clients are top shelf clients. I mean you're talking about the biggest corporations in the world. And they go to Appleby um to help, but basically hide um their money and to move their money around the world so that they pay less taxes.

MARIAN WILKINSON: The firm was founded in Bermuda in 1898 by Major Reginald Appleby, a cricket loving, tea drinking Anglophile. Today Appleby is one of the top offshore law firms in the world. Using a tax haven can be a legitimate business practice. And Appleby argues everything it does is perfectly legal. But that's hard to know because much of their work has been hidden from public view - until now. For years Appleby has held the secrets of celebrities, rich listers and top corporations in their files. Now, those secrets are blown.

GERARD RYLE, DIRECTOR, ICIJ: What we're looking at here is the biggest leak in history, ah looking at thirteen and a half million documents. And it comes from 21 different sources. We're looking at two law firms that specialise in offshore tax havens, but you're also looking at 19 company registers. In other words, these are the registries that countries keep of their offshore holdings, of come- you know, people that come and register in their countries.

MARIAN WILKINSON: The leak is called the Paradise Papers. The documents cover tax havens all over the world. Almost seven million documents come from Appleby. The Paradise Papers unravel the off shore financial affairs of some of the world's top corporations as well as the rich and famous.

GERARD RYLE, DIRECTOR, ICIJ: There are very powerful people and their secrets in these documents.

MARIAN WILKINSON: They include; The Queen whose personal estate is tied up with an off-shore fund that invested in a finance company accused of predatory lending. Canadian billionaire, Stephen Bronfman, a close confidante and fundraiser for Prime Minister Justin Trudeau. Bronfman is embroiled in a controversy over millions of dollars moved into offshore trusts. Russian tech guru, Yuri Milner. His firm was used to funnel huge investments into Mark Zuckerberg's Facebook that were bankrolled by a Kremlin controlled company. Milner also personally invested in a start-up company co-founded by Trump's son-in-law, Jared Kushner. Australian billionaire, James Packer and former his partner, Lawrence Ho, used Appleby to set up their Macau casino, Studio City, offshore in the British Virgin Islands. And the late Michael Hutchence, had his intellectual property hawked by an offshore company set up to exploit the twentieth anniversary of the Rockstar's death.

GERARD RYLE, DIRECTOR, ICIJ: These are documents that, you know, people never thou- thought would ever see the light of day.

MARIAN WILKINSON: In Washington DC the giant database of financial documents was dropped to the ICIJ, the International Consortium of Investigative Journalists. The documents were obtained by the German Newspaper, Suddeutsche Zeitung following last year's publication of the Panama Papers. As a member of ICIJ, Four Corners was given access to the new secret data base.

GERARD RYLE, DIRECTOR, ICIJ: We are seeing things that people need to know about. We're seeing the lengths that companies do go to avoid taxes. We're seeing secrets. There are more than 120 politicians around the world that we've found in the documents. I think the public has a right to know what we're going to reveal.

MARIAN WILKINSON: The most prominent politician in the Paradise Papers is a senior member of the Trump Administration. When Trump was elected he picked many of his cabinet from the super-rich. The leaked documents now reveal one of those cabinet secretaries had extensive dealings in tax havens. He is the US Secretary for Commerce and his job is to be the voice of business inside the Trump administration. Billionaire Wilbur Ross is a long-time friend of Donald Trump. At his nomination hearings, Wilbur Ross came under attack from Democrats over his Wall Street career and his business dealings with Russia.

ELIZABETH WARREN, DEM. SENATOR: Mr Ross is a wall street billionaire with a long history of profiting from the suffering of others. He also has shady ties to Vladimir Putin's Russia. That's just his record.

MARIAN WILKINSON: Documents leaked from Appleby give new insights on how Wilbur Ross still profits from a company run by President Putin's inner circle, including his son in law, Kirill Shamalov. Ross' former private equity firm, WL Ross and Co had scores of companies created or maintained by Appleby most of them in the Cayman Islands tax haven. Several held stakes in a big US shipping company called Navigator Holdings.

SASHA CHAVKIN, MARIAN WILKINSON, ICIJ: Wilbur Ross' private equity fund started investing in Navigator Holdings in 2011. By 2012, he was a majority shareholder in Navigator. He also took a seat on the board of Navigator Holdings.

SASHA CHAVKIN, MARIAN WILKINSON, ICIJ: SIBUR's owners are members of Vladimir Putin's inner circle. Ah they include his son-in-law, Kirill Shamalov ah who's married to Putin's youngest daughter. Gennady Timchenko who's a Russian oligarch who's been sanctioned by the United States and European Unions since 2014.

DANIEL FRIED, FORMER US AMBASSADOR & SANCTIONS COORDINATOR: Gennady Timchenko for many years has been known as one of the inner circle of Putin's cronies. Now I should explain the term. Um Russia has a class of rich businessmen called oligarchs, they all must in some way these days ah collaborate with the system. But cronies are a particular sub-set of this group, they are people who are personally, financially involved with Putin. They are people who have helped make him wealthy, often we suspect through corrupt means. This is not a secret. These people have been known for a long time.

MARIAN WILKINSON: Former US Ambassador Daniel Fried co-ordinated President Obama's sanctions policy against Russia after it invaded Ukraine.

DANIEL FRIED, FORMER US AMBASSADOR & SANCTIONS COORDINATOR: We wanted to make it clear that Russian businessmen close to Putin, the people, the so-called cronies who had helped make Putin an extraordinarily wealthy man would suffer consequences for Putin's aggression.

MARIAN WILKINSON: SIBUR itself was not sanctioned so it could trade with the west. But other companies associated with its largest shareholders, Gennady Timchenko, and Leonid Mikhelson were hit with trade restrictions.

SASHA CHAVKIN, MARIAN WILKINSON, ICIJ: Mikhelson who's reputed to be the richest man in Russia ah and his company, Novatek has also been sanctioned by the United States.

MARIAN WILKINSON: Wilbur Ross stepped down from the board of Navigator Holdings after the sanctions were imposed. But it now appears when Ross joined the Trump Administration he kept a stake in Navigator worth millions of dollars.

SASHA CHAVKIN, MARIAN WILKINSON, ICIJ: Wilbur Ross seems to have kept his stake in Navigator Holdings even though he continues to serve as Commerce Secretary and he's kept that stake through a chain of Cayman Island's companies that are managed by Appleby, ah the offshore law firm whose documents are at the heart of this project.

MARIAN WILKINSON: In his ethics disclosure form Wilbur Ross did say he was keeping a stake in several Cayman Islands companies. But the Appleby leak makes it clear for the first time the companies are linked to Navigator Holdings and its Russian contracts. In a statement Wilbur Ross said he had undertaken to recuse himself in any matter where he had a conflict of interest with his role as US Secretary of Commerce. He also said he had never meet the three Putin cronies in SIBUR.

DANIEL FRIED, FORMER US AMBASSADOR & SANCTIONS COORDINATOR: I will say as a general rule my advice in and out of government would be the same keep yourself several degrees of separation from sanctioned individuals. The Paradise Papers will add to the political pressure on the Trump Administration. But they will also refocus public scrutiny on US multinational tax avoidance.

MARIAN WILKINSON: In Australia, multinational companies have long been accused of not paying their fair share of tax. Sportswear company Nike goes to great lengths to market and sell its expansive shoes here. Like putting on a run club at Sydney's Bondi Beach.

MATTY ABEL, HEAD COACH, NIKE: Today is about testing out the brand and seeing if you like it. For Nike we have our faster shoes which are for springing. We have our softer shoes which are for longer running and we have our training shoes that's for cross training in the gym style running. So Nike's the best shoe.

MARIAN WILKINSON: Despite selling around half a billion dollars worth of sports gear in Australia last year, Nike only paid around four and a half million in tax. That's because Nike recorded tiny profits here, around 2 percent of its sales. But analysts argue Nike has been shifting its profits into tax havens.

MATTHEW GARDNER, INSTITUTE ON TAXATION AND ECONOMIC POLICY: We know that they're shifting their profits out of the US and other countries and into tax havens at a pretty fast clip, last year alone Nike increased their permanently reinvested offshore cash by $1.5 billion, what that means is they have $1.5 billion of profits that they say they're earning somewhere other than developed nations and on which they're paying virtually no tax.

MARIAN WILKINSON: The Paradise Papers help explain how Nike does it. For years, the rights to Nike's iconic Swoosh logo and its trademark shoes were held in companies in Bermuda maintained by Appleby.

MATTHEW GARDNER, INSTITUTE ON TAXATION AND ECONOMIC POLICY: A few years ago we noticed that Nike had something like a dozen subsidiaries in Bermuda, itself kind of a strange thing to do, but that they were naming all of them after specific shoe brands. The most likely scenario is that Nike is doing what a bunch of other companies have done, shifting their intangible profits into Bermuda.

MARIAN WILKINSON: There are no Nike stores in Bermuda but Nike recorded billion-dollar profits here with the help of Appleby. Nike's Bermuda companies charged expenses like big royalty fees on shoes sold around the world. They booked the profits here where they could avoid tax.

MATTHEW GARDNER, INSTITUTE ON TAXATION AND ECONOMIC POLICY: It's justifiable to write off these expenses and certainly Nike can reduce its pre-tax income in the US or in Australia by the amount of ah these expenses, but it sure looks like Nike, like many other companies, is artificially inflating these expenses in an effort to shift its profits ah from Australia, from the US to tax havens.

MARIAN WILKINSON: Nike shut down its Bermuda operation three years ago. It now uses companies in the Netherlands, another low tax nation, to shift its profits.

MATTHEW GARDNER, INSTITUTE ON TAXATION AND ECONOMIC POLICY: That companies are able to use the Netherlands as sort of a conduit in channelling its royalty income from developed nations into tax havens, um so having a subsidiary in the Netherlands is I would say every bit as indicative of tax avoidance activity as having a subsidiary in the Bermuda or the Cayman Islands.

MARIAN WILKINSON: Nike declined to be interviewed by Four Corners but said in a statement it complies with tax regulations and ensures it tax filings are fully aligned with its business. The Australian Tax Office has ramped up its efforts against multinational tax avoidance targeting companies like Apple and Google with the help of new laws. But it's an uphill battle.

MARK KONZA, DEPUTY COMMISSIONER, ATO: There are 1,300 ah large businesses operating in Australia and it's hard for me to sit here and say we've got them all covered at this stage. I think though we've got the market leaders in every sector covered and I think that we've recouped a lot of tax that may have been lost in previous years. We issued $4 billion dollar's worth of ah back assessments last year.

MARIAN WILKINSON: Four Corners can reveal the ATO is already pressing its global contacts for access to the leaked Paradise Papers for investigations in Australia.

MARK KONZA, DEPUTY COMMISSIONER, ATO: We have been able to use networks that we have established around the world um to to get access to that data we're hoping quite soon ah to get access to that data ourselves and begin analysing the Australian implications ah of that data set.

MARIAN WILKINSON: The tax office is currently pursuing inquiries into tax avoidance by multinational mining and energy companies.

MARK KONZA, DEPUTY COMMISSIONER, ATO: It's a approaching 20, um maybe, um about that figure. Ah we, our audits in energy and resources is really ah around the um amount of debt and the pricing of debt ah that's being placed into Australian subsidiaries by foreign companies and also the use of ah hubs in low tax jurisdictions.

MARIAN WILKINSON: One giant resources company under audit by the tax office is heavily featured in the Paradise Papers. It was Appleby's third biggest client until recently and hundreds of its confidential emails, board minutes and papers are exposed. It's the Swiss mining and commodities company, Glencore.

KATE KELLY, AUTHOR, 'THE SECRET CLUB THAT RUNS THE WORLD': It operates in six continents around the world. The only continent it's not on that I'm aware of it Antarctica. It deals with more than 90 different commodities. It employs over 150,000 people, plus contractors. It's a truly global enterprise that deals with a lot of the things that we need in order to fuel our lives, in order to fuel our bodies.

MARIAN WILKINSON: Its chief executive Ivan Glasenberg and his partners made a fortune when Glencore listed on the London stock exchange.

KATE KELLY, AUTHOR, 'THE SECRET CLUB THAT RUNS THE WORLD': There are four partners that are listed on the Forbes billionaires list, became billionaires as a result of that. Glasenburg's net worth right now is estimated at about 6.2 billion.

MARIAN WILKINSON: When Glencore merged with Xstrata, a company it part owned, it took over many Australian mines.

KATE KELLY, AUTHOR, 'THE SECRET CLUB THAT RUNS THE WORLD': They wanted to create a huge, multi-national conglomerate that had a more robust mining piece than what they had prior to the deal. Now, they did mining as well, but this gave them a level of scale where they are now top competitors with BHP Billeton , Rio Tinto, Vale, and others..."

MARIAN WILKINSON: Glencore is Australia's biggest coal miner and also exports copper, zinc, nickel, oil, grain and cotton. But the company has been dogged by allegations of aggressive tax avoidance and bitter disputes with unions, like this one in Central Queensland. Glencore has locked out striking workers at its Oaky Creek mine for more than three months in a toxic battle with the CFMEU as the company tries to cut overtime and entitlements in exchange for small pay rises. The union wants to keep their old agreements and argues Glencore can well afford to pay.

STEVE SMYTH, CFMEU: Coal's at two hundred and ten US dollars' a tonne. This is a metallurgical coal mine, it should be a place where you print money, you know. By the end of the day, if they're not making money, it's because obviously the direction of the way their managing the place.

MARIAN WILKINSON: Glencore does earn a lot of money in Australia. In 2014 it reaped over $23 billion in revenue. But its losses and expenses were so great it paid less than 1% of that in corporate tax.

JAMES HENRY, TAX JUSTICE NETWORK: Well, it's a typical pattern that you would say um many ah extra- I think companies that are involved in the extractive industries have used to basically move ah income from, from high tax jurisdictions to low tax ah jurisdictions. It's just a tax avoidance scheme. It's been done by dozens of ah companies. The mineral industry is rife with this behaviour. I think Glencore is one of the more egregious ah participants in this, but it's not unusual.

MARIAN WILKINSON: Glencore's Australian office says its profits and taxes here were affected by lower commodity prices and some inherited dud deals. But they were also affected by the big debts over its Australian operations. This leaked document shows Glencore's heavy reliance on debt from its merger with Xstrata. The debt restructure used a Glencore finance company in Bermuda. Glencore's Australian subsidiaries had a whopping $11.6 billion debt by 2014 with few profits and little tax paid despite its huge revenue.

JIM KILLALY, FORMER DEPUTY COMMISSIONER, ATO: There's almost a force of gravity in the system that rewards companies and their management and their advisors for the avoidance of tax.

JIM KILLALY, FORMER DEPUTY COMMISSIONER, ATO: Well, there's a huge tax advantage. Interest is tax deductible and it's paid out of your earnings before you pay any tax, so it's much more tax efficient to fund your subsidiaries with debt.

MARIAN WILKINSON: The Paradise Papers show Glencore organised it's the financing of its debt with the help of Appleby. Glencore didn't have an office in Bermuda but Appleby gave it a phone line, a computer, and lawyers on tap. In the building behind me, two local Appleby lawyers signed documents for Glencore involving millions and sometimes billions of dollars. On the face of it, it seems absurd that one of the world's largest commodities companies would put such enormous power in the hands of two Bermuda lawyers.

JIM KILLALY, FORMER DEPUTY COMMISSIONER, ATO: It would seem curious to me that you've got unrelated directors sitting in a low tax jurisdiction controlling significant values of flows. It just seems a bit commercially unreal to me.

MARIAN WILKINSON: The leaked documents show Glencore used Appleby to help hedge its debt deals with exotic financial contracts called cross currency interest rate swaps. These swaps can be perfectly valid but can also be used by multinationals to avoid tax.

JIM KILLALY, FORMER DEPUTY COMMISSIONER, ATO: If they're different subsidiaries within the same group the swap can actually be financially engineered so that the loss appears in whatever country you want it to, and the corresponding profit appears in whatever country you want that to land in. It's like they've taken money out of one pocket and put it into the other pocket. They've still got the money, but they haven't paid tax.

MARIAN WILKINSON: Glencore told Four Corners it used the scheme legitimately but dropped it last year in its Australia operations. Glencore insists this was not because of action by ATO. The Tax Office is now inquiring into the scheme's abuse.

MARK KONZA, DEPUTY COMMISSIONER, ATO: It took us a little while to detect it, but now we have we we we are are following it up, we're making a lot of inquiries about it.

MARIAN WILKINSON: have you got a number of companies in your sights on those schemes?

KATE KELLY, AUTHOR, 'THE SECRET CLUB THAT RUNS THE WORLD': They sold off a number of assets. They lowered their net debt. Today I believe it's about half of where it was at the end of 2015. It's gone to roughly $15 billion dollars from roughly 30.

MARIAN WILKINSON: Glencore says it is now slashing its Australian debt by $US4 billion. It told Four Corners it is not under tax audit over its debt levels but is discussing them with ATO this month. Glencore also expects to pay more tax this year on higher profits.

JAMES HENRY, TAX JUSTICE NETWORK: In the tax world, ah the line between law and, you know, illegality is always fuzzy. Ah and there's a kind of probability distribute- distribution of, you know, will we get audited? Ah you know, how long will that take? You know, ah what are the chances we will survive?

MARIAN WILKINSON: Appleby insists what they do in the offshore world is legitimate. But the Paradise Papers reveal they were prepared to bend the rules in some very dubious deals. Including one to exploit the legacy of Australian rock star, Michael Hutchence.The INXS front man was a superstar.

TOBY CRESWELL, MICHAEL HUTCHENCE BIOGRAPHER: Michael was kind of unique. And that's why people are still interested. He had a presence on stage that was kind of unsurpassed. He was incredibly sexual, and beautiful to watch. Great performer, and a really gentle kind of soul, and it's unfortunate that it's trashed.

MARIAN WILKINSON: As his success grew, Michael Hutchence wanted to move most of his wealth offshore to avoid tax. A lawyer became his trustee and advisor. An elusive man called Colin Diamond.

RHETT HUTCHENCE, BROTHER OF MICHAEL HUTCHENCE: With regards to Colin, I haven't trusted the guy from the beginning, um. He's never, ever come forward and tried to explain to our family, telling each one separately Michael wanted, Michael would have wanted you to be looked after. Those words, and it's just to keep us all quiet, and then he disappears and that's, you know, with everything.

MARIAN WILKINSON: Colin Diamond set up an offshore trust to hold Hutchence' s music rights. The trust was called Chardonnay Investments. It's has been bitterly contested for two decades according to Michael's brother Rhett.

RHETT HUTCHENCE, BROTHER OF MICHAEL HUTCHENCE: Chardonnay, uh, to my understanding, is Michael, Michael Hutchence's discretionary trust, which was, uh, made in 1992, and it's supposed to be a carrier for Michael's, uh, royalties and, um, my, the copy of the trust that I have shows my father being a beneficiary. However, it seems as though Colin has taken any of the Hutchence names off the, the list and replaced it with his.

MARIAN WILKINSON: Diamond argued he had to protect Michael's money from the demands of his dysfunctional family and friends, especially after Hutchence daughter, Tiger Lily was born. Michael Hutchence died suddenly and tragically in 1997. Hutchence hanged himself with his own belt on the back of a hotel door in Sydney. The ugly battle over his estate began almost immediately.

RHETT HUTCHENCE, BROTHER OF MICHAEL HUTCHENCE: Two days after Michael died, Colin Diamond went into the Rose Bay Police Station, um, acting as Michael's attorney, and took hold of all of Michael's possessions that he had with him in Australia. He kindly left the belt that Michael used for, for my father to pick up. My father was I mean, the whole family was completely shocked that he had actually taken all this stuff. We have never seen any of it. All I have got now is a, the police inventory showing all of Michael's items on it.

MARIAN WILKINSON: Rhett is still angry that the family got nothing from Hutchence's estate despite a long, costly legal battle.

RHETT HUTCHENCE, BROTHER OF MICHAEL HUTCHENCE: All the money slowly dwindled to a point where we became pecuniary beneficiaries, meaning that there was nothing left for any of us, for anybody really, for nothing. I mean, there was nothing there. It all got chewed up in legal fees. They sold off a lot of his assets, even, you know, to do that.

MARIAN WILKINSON: Now documents leaked from Appleby reveal that Colin Diamond is not just claiming to be Hutchence's trustee, but the ultimate beneficial owner of all the star's remaining assets held in Chardonnay Investments. In a leaked email from 2015, Colin Diamond's lawyer tells Appleby: "Chardonnay is controlled by Colin Diamond and (by) virtue of him being the ultimate beneficial owner, he controls the assets of Chardonnay. The reason for this is that he was a trusted friend of Michael Hutchence...and that he (MH) had various family issues."

MARIAN WILKINSON: Rhett Hutchence disputes Diamond's claim.

RHETT HUTCHENCE, BROTHER OF MICHAEL HUTCHENCE: I'm not even sure whether he has the right to have these rights. Um, he's never shown anybody in court, nobody's challenged him enough to take him to court to show him, for him to show that he has these rights. Uh, I don't believe he does. I really don't.

MARIAN WILKINSON: Appleby's lawyers knew Michael Hutchence estate was disputed, but in December 2015 they agreed to set up a company to allow Diamond to cash in on the twentieth anniversary of the rock star's death. The joint venture was called Helipad Plain Limited and its purpose included the, "...commercial exploitation of the sound recordings, images, films and related materials embodying the performance of Michael Hutchence".

MARIAN WILKINSON: Diamond's interest was held by Chardonnay Investments. His partner was Ron Creevey a discharged bankrupt turned tech entrepreneur. One of Creevey's investors was John Ibrahim, the notorious King of the Cross and associate of organised crime. Creevey and Diamond planned to use a new documentary on Hutchence to promote a trove of his unreleased songs and profit from the music rights held by Chardonnay. The Channel 7 documentary, The Last Rockstar, was the vehicle for Diamond and Creevey's plan. But Creevey fell out with Diamond and says he walked away with nothing. Colin Diamond became a star of the show in the role of Tiger Lily's godfather. Many of Hutchence's friends and family were stunned to see Diamond revealing the star's intimate possessions left in his room the night he died, even his diary.

RHETT HUTCHENCE, BROTHER OF MICHAEL HUTCHENCE: That's the same diary that they use in the doco. Um, I don't know why they've got the. Why did they have the rights to have these things? To have first access to these things, to show the world these things, when they're not even, you know, they should be part of the ... that should be part of the estate.

MARIAN WILKINSON: Diamond had claimed the deeply personal items as an executor of Hutchence's will twenty years ago. Now suddenly he was exploiting them, including the last words the singer wrote. Michael Hutchence didn't leave a suicide note. But in his room, in his distinctive hand writing, police found the lyrics to his last song.

RHETT HUTCHENCE, BROTHER OF MICHAEL HUTCHENCE: It's the family stuff. It should have been all delivered over upon Michael's death. But, no, he kept it. And he, uh, yeah. He's still got it. None of that stuff has ever been released to the family. It was just another little poke in the guts, basically.

MARIAN WILKINSON: Since Michael Hutchence death his rights are estimated to have earned a fortune. It now appears that money went to Colin Diamond to use at his discretion.

TOBY CRESWELL, MICHAEL HUTCHENCE BIOGRAPHER: Over the past 20 years, it would have to be tens of millions of dollars, without a doubt. Maybe 30, maybe 50, I would think.

MARIAN WILKINSON: Channel 7 said it didn't pay Diamond for his co-operation in the documentary. But it did heavily promote the Hutchence songs he will profit from. Colin Diamond did not respond to our approaches. We understand he has made payments over the years to Tiger Lily but not the full value of her father's rights. The rest of the family got nothing.

RHETT HUTCHENCE, BROTHER OF MICHAEL HUTCHENCE: You know, I think it's about time we had a platform and told what's been going on, because it's, it's injustice, you know? What has happened is injustice.

MARIAN WILKINSON: Despite recent efforts to make the offshore world more transparent, it is still difficult for the public to know what goes on here. Before we left Bermuda we approached Appleby with a request for an interview, joined by a number of our colleagues from ICIJ. No-one was prepared to talk to us. Appleby later said in a statement it had investigated all the allegations we put to it. "We are satisfied that there is no evidence of any wrongdoing, either on the part of ourselves or our clients." Appleby also said its data had been breached. Australian tax authorities say that should be a warning.

MARK KONZA, DEPUTY COMMISSIONER, ATO: These firms say we offer comprehensive ah security and privacy but ah ah the guy fixing the server strips all the data or an employee who becomes dis, disillusioned with what they're seeing takes all the data. You know our general warning is don't get involved in these sorts of um scheme arrangements, don't get involve, involved with these sort of secrecy arrangements because our experience is that ah they do go wrong and when they go wrong, it, it's very bad for you.

MARIAN WILKINSON: There is a valid argument that offshore firms can operate legally and legitimately. But some bend or break the law and so do their clients. And tax authorities around the world are now finally putting them under scrutiny.

MARK KONZA, DEPUTY COMMISSIONER, ATO: There is a need for us globally as revenue administrations to work together to look at what these intermediaries are up to and attempt to disrupt their operations.

MARIAN WILKINSON: As long as wealthy corporations and the super rich can use the offshore world to aggressively avoid tax and shield their dealings, the burden of paying for a civil society will increasingly fall on the rest of us.

SARAH FERGUSON: You can find responses from some of the companies and individuals identified in the Paradise Papers on our website and keep up with new revelations in the story at ABC news online.

Next week the Federal Government in turmoil, can Malcolm Turnbull hold his party together?